Three Most Common Types of IRS Tax Penalties and The Ways to Waive Off

There are a number of business owners and individuals who have filed and forgotten their tax returns. If you are among those, you might have already got an abrupt reminder for an IRS penalty. Below are discussed three most common types of IRS tax penalties and the way how can get relief.

1. Unable to file and unable to pay:

The IRS considers a number of factors that prove that you were really unable to complete your federal tax obligations in spite of trying to do so by using all the ordinary business care and prudence. The factors, that the IRS considers, include fire, natural disaster, casualty or other disturbances. The agency also accepts the unavoidable circumstances like deaths, serious illness and unavoidable absence of the taxpayers.

If your reasons for not being able to file and pay tax does not include the above causes or if you don’t have a strong reason for filing and paying late, you might be able to apply for FTA (first-time penalty abatement) waiver. In order to qualify for a relief, you should have

• The receipts of no penalty for the last three tax years along with the year in which you received a penalty.
• To arrange and pay the tax in the due date
• The valid reason for the extension of time to file

The CPA Beverly Hills can help you to take you out of the situation in the most efficient way possible.

2. Tax miscalculation:

You can abate your penalties if you are able to prove that the IRS has made a mistake in calculating penalty by using different methods or crediting your payment to the inaccurate tax period. If you are able to do so, you can reduce or eliminate the penalty. Needless to say, only a professional CPA Beverly Hills are able to do so.

3. Incorrect tax filing:

You might be able to apply for a penalty if the IRS finds that your tax return file was prepared negligently. However, you can get relief from this penalty if you can show that you disclosed your tax position properly in your return.

It can be said that you can get relief from the IRS penalties if the chances of withstanding an IRS challenge is more than 50%. However, if you want to enjoy your tax season without giving any penalty or if you want to save money on tax, then you should outsource your tax work to a CPA in Beverly Hills who has years of experience in this field.